COMPANY BACKGROUND
Eastern Forwarding & Warehousing Agencies Sdn Bhd is a party involved in logistic activities. They offered a service as forwarding agent and as a public bonded warehouse. This company was founded on June 1986. The founder or the owner of this company is Khoo Tin Tuck from Kuala Lumpur. They are the only public bonded warehouse that exists in Kelantan. Only them that offered such service to others company or individual. Public bonded warehouse is the warehouse that had been gazette by custom which is the place that stored dutiable goods. Eastern Forwarding & Warehousing Agencies is a public bonded warehouse that receives any dutiable or non-dutiable goods that come from other country or oversea. Any goods that stored in their warehouse are not done any payment of taxes, it is means those goods is still under custom supervise, so any owner of that goods need to pay all the required taxes to Eastern Forwarding & Warehousing Agencies before they allowed to bring out the goods from the warehouse.
All goods that stored or keep in Eastern Forwarding & Warehousing Agencies will be charged some taxes of export and import duty. Before, the enforcement of Goods and Services Taxes (GST) in Malaysia, all dutiable goods will be charged based on the type of goods, for example the clothes from India need to pay 2/10 of taxes before the owner can continue his business activity. But after the enforcement of GST, all dutiable goods need to pay 6% of taxes; even non-dutiable goods that stored at their public bonded warehouse will be charged 6% of GST. Therefore, there is an exemption cases, especially for student that have done their study at the oversea and need to shipment all his individual things to Malaysia, the Eastern company need to go through some special procedure to exclude that student from any tax or duty, but it is only for certain student. Thus, Second exemption cases, any goods stored at eastern company warehouse that need to transfer to any free duty places likes Pengkalan Kubur, Kelantan is exemption from any duty fee with a condition, the process of shipment must using any bonded lorry or van that had been gazette by custom and it is need to be sealed with special seal from custom. In term of custom seal, the eastern company need to be more careful and meticulous in handling the shipment, if the seal was cut during the shipment, they need to prepare the rational reason on how it happen in the court. It is really serious matters, because all the goods that not yet free from any duty is under government or custom control. If any unpredictable situation happen or any accident happen towards the bonded van during the shipment, the eastern company will make a police report first and go to the nearer custom office from the accident places to report everything that happen and let them investigate it.
During late 90s, Eastern Forwarding & Warehousing Agencies is one of the busiest forwarding and warehouse company at Kelantan, on that time they possessed 22 lorries of 40 feet. They will do a shipment directly from Singapore to Pengkalan Kubur, Kelantan. But now, time to time, this company was gradually slowing down their logistician activities and now they only do a forwarding activity that required in small shipment and receive or stored any goods from Kota Bahru airports only. That’s why, now they not frequently receive any goods from airport, it might be once or twice in a month. Even though, they still can be survive and continue their business activities due to the Eastern Forwarding & Warehousing Agencies is the only public bonded warehouse in Kelantan, which is they do not have any competitor in that field.
As a company they also want to be developed company and able to compete with other forwarding company in the same level, so their vision is they want to be one of favoured public bonded warehouse at the time the airports of Kota Bahru are transforming into international airport. On that time, their service is urgently needed and really important.
2.0 TECHNOLOGY APPLICATION AND WHY IMPLEMENTING IT
2.1 ELECTRONIC DATA INTERCHANGE (EDI)
Electronic data interchange (EDI) is an electronic system where information of a business can be pass through it to another company using a standardized format and the information are send electronically or to be more precise is paperless of data exchange. Business parties that conducting business electronically are called trading partners. As for Eastern Forwarding & Warehousing Agencies Sdn Bhd, they are using EDI system for their warehousing management where they are exchanging information mainly with headquarter in Putrajaya.
As a bonded warehouse, they are receiving items or raw materials from oversea and the items need to be place in their warehouse. The items are being import from oversea and because of unpaid tax, bonded warehouse are needed in order to become the intermediaries. Before EDI is being created, they need to do every documentation manually by using lots of paper and forms to be filled. The forms that involve are Customs form 1 and Customs form 8 for incoming and outgoing of items from the warehouse. Other than that, Air Waybill is the form for documentation of the items that contain every detail of the items once the items has arrived at airport Kota Bharu, Kelantan.
However since they need to use EDI system in 2006, every procedure has become easier than before although it is very tough for them in the first place because of unfamiliar with the technology. Every form that need to be filled up can be done through online before send it to Putrajaya in order to get the registration number. Once they have the registration number for the items, they need to go to customs office in Kota Bharu to pay tax of 6%.
According to Puan Rosnani, since they are using EDI system, it has lighten the work load of the appointed staff to do every documentation for every items. The staff has to print out only one sheet of paper containing every single detail of the items for their references in the future. By using the registration number provided for every items, customs officer also can detect from where the items come from and who is the owner.
Not only for making procedure quicker than before but EDI system also could save the environment from pollution where it will be paperless in the future and it will prevents from illegal logging happening which could lead to flood. As a matter of fact, EDI system can be learn easily because the features are every simple and every form in it has the same name with the previous form. Specifically, Eastern Forwarding & Warehousing Agencies Sdn Bhd is implementing EDI system in their business because it is able to make the work become easier, paperless and easy to be learn.
Along with the development of technology nowadays, it is a must to have a system in a business in order to make it accessible from any place the person are. It also using the same standard so that it can be read or used by everyone in the business. Not to mention that it has no annual subscription or maintenance fees to be paid other than it can shorten the time to value because of no training are needed.
3.0 BENEFITS AND PROBLEMS FACE BY COMPANY TOWARDS APPLIED TECHNOLOGY
3.1 BENEFITS FOR COMPANY TOWARDS APPLIED TECHNOLOGY
Eastern Forwarding & Warehousing Agencies Sdn Bhd uses the system of Electronic Data Interchange (EDI) as their technology. This technology gives a lot of benefit to the company such as listed below.
3.1.1 COST SAVING
By using the EDI technology, it can help the Eastern Forwarding & Warehousing Agencies Sdn Bhd to save the cost of employee’s hour time of work. The technology helps in reduction of employee’s time hours of work involved in creating and handling of paper documents. So that the company will use the technology automatically.
Before that company uses the EDI technology, they use the manually technology such like record all the data in the book. After the customs uses the EDI technology, Eastern Forwarding & Warehousing Agencies Sdn Bhd need to update their technology into the EDI technology. The technology is necessary that company because the customs use that system.
Besides that by using the technology, it can help the company to reduce the waste of paper. Because all the information from consignee, it will be through to the system. That so, they just key in all the information from consignee into the EDI system. The system makes the employee’s work become easier and the company can reduce the hours of work.
On the other hand, the company will be reduced all the expenses such as printing, reproduction, filing, postage and document. It show that by using the technology it can reduced or eliminated all the expenses. Then the company will cut the cost and the waste of expense will be reduces. From that point, the company can their save their budget and expenses.
Besides that, the company also can avoid and eliminated when the errors illegible faxes, the loss of order customer or incorrectly taken phone orders. The EDI technology can help the worker to get the information without getting the wrong detail of the product. That so, the detail of data will be complete and make to the agent forwarding easy to key in data into EDI system.
Furthermore, when the company used the EDI technology, it will help the company reduce the cost of the storage space. The employee doesn't need to use the paper to save the data. By using the system, the employee just key in the data into form EDI and the data will be transferred to Putrajaya to get the number tracking.
The tracking number will intemperate all the information about the consignee, information about the items, date and time, type the vehicle uses and about the consignor. All the information will be keying into the EDI system to get the tracking number. From the tracking number, it will help the process pick up the containers. Besides that, the custom will know the container or better still in seal tax or not.
Moreover, EDI technology also helps the company reduce the cost of the mailing. The technology help company reduces the deliver the mail. They did not deliver the mail to post office or other queries. By using the EDI, they only deliver by using the email or the system. That so, it makes the easy the worker to send information faster and save. Besides that, it reduces time of workers.
3.1.2 SPEED
EDI technology also makes the work easier for the company such like forwarding agencies. By using the EDI system the forwarding agencies did not use the many papers to form the items. They will use the EDI system to form the documents through a computer network. That technology, it makes the process faster. The email will be sent to the consignee and consignor directly and the document will be receive to them faster and do need wait too long. Usually, the scale of speed by using the EDI technology in the business is 61%. The EDI technology, can exchange transaction the document will be faster and it did not take too long to waiting the document receiver.
3.1.3 ACCURACY
The EDI technology helps the communication to the consignee and consignor through the direct and easy verifiable. That so, the company did not use the mail to get the information from the consignor and consignee. The other hand, the company will get the detail of information about the product directly from the consignor. That so, it makes the transaction of operation smoother and faster.
Furthermore, EDI can improve the quality of work. By using the technology it can reduce the transaction errors from illegible handwriting, lost faxes/mail and keying errors. By using the EDI it also can help the company to reduce the order to cycle time. That so, the company will be improving the business partner tractions and relationship.
3.1.4 SECURITY OF TECHNOLOGY IS SAFE
When the company uses the EDI technology, the information of data will be safe. To protect the document, they need to use the technology to avoid the document will be falsification. That show, by using the EDI technology it can help the company to protect the document to be safe. Besides that, EDI technology can help companies avoid the mistake and loss of mail.
The integration of EDI software can be interfaced with the internal system. The system incoming from the data trigger application and further automation of data processing. When the company used that system, it helps the company to link directly with the two parties and third party. Besides that, it also helps the company to make the payment of duty import or export to the customs.
3.1.5 JUST IN TIME SUPPORT
EDI technology is the necessary items are shipped by the vendor and directly in the manufacturing reduces inventory costs. By using the EDI technology, it can help the company to minimums the inventory cost. That so, it helps the company reduces the cost and minimums the space of the inventory. Furthermore, the speeding of communication enhances intercompany just-it-time operation which significantly reduces inventory costs.
3.2 PROBLEMS FACE BY COMPANY TOWARDS APPLIED TECHNOLOGY
Using the EDI technology has the problem to Eastern Forwarding & Warehousing Agencies Sdn. Bhd to face up. All the technology has they own problem and barriers. That company has also had problems the technology such like:
3.2.1 THE ELECTRIC RESOURCES OUT
When the electric resources out, it can cause the transmission and reception of information cannot be done. In addition, the company also cannot be operations and performed because not job receive. Besides that, the company profit could be affected because they cannot operate the business. In other hand, they cannot link to other parties because the operation breaks down.
3.2.2 NO INTERNET LINE
If they want to use their EDI technology, the line of network must be strong and capable to connect. When the line of network slows the connection will slow and the detail of information will also late. That so, the company will be making the problem because the connection is slow. Then, they need to use the manually to communicate with the consignee and consignor.
3.2.3 THE NUMBER OF TRACKING WRONG
EDI technology is the technology high depending on the participation of trading partners. The company has always come face the problem when the tracking number wrong. That so, it causes the detail of information will be wrong and they need to contact back to the consignee and consignor to get the information. Therefore, the company needs to take responsibility to deliver or pick up the product with the right time. If not, they will responsible all the charges by deport.
Furthermore, the company need start the first process and arrangement with the custom again. It’s because when the number tracking wrong it causes the product or goods will be delivery wrong places and the factory need take responsibility with loss. Besides that, the process the custom will might be a problem because the product will be cannot declare.
4.0 RECOMMENDATION
We have some suggestion to propose to Eastern Forwarding & Warehousing Agencies Sdn Bhd Firstly, we suggest to them to start over their forwarding service like their era on late 90s, which is they have more lorry and more active on that time. Instead only do a shipment within Singapore and Pengkalan Kubur, Kelantan, why not they try to add more country to provide a same service to them, likes Thailand, or Vietnam. Lately, both countries have gradually developing their manufacturing field which means many products they want to market globally. Eastern Forwarding & Warehousing Agencies Sdn Bhd should take these opportunities to distribute their product directly to any free duty place, such as Pengkalan Kubur, Rantau Panjang, or other places out of Kelantan.
If the first suggestion is taking serious effort, they might need more additional suggestion that can supports their activity, which is enlarging the warehouse that able to increase the capacity. More space will fits to more goods. If the space is bigger than before, the arrangement or management of goods they need to store is more easy and efficient. They also able to fulfill the requirement from certain company that want to store their good in big volume.
After all, we hope that government will fasten the process on transforming the airport in Kota Bahru to be international airport. There are many opportunities on developing more logistic activities in Kelantan and automatically the growth of development of Kelantan will drastically increase and also give good impact on Gross Domestic Product (GDP) of Malaysian economy.
5.0 CONCLUSION
To summarize our report, the establishment of Eastern Forwarding & Warehousing Agencies Sdn Bhd in 1986 is to provide services such as forwarding agent and as a public bonded warehouse for other company and also for individual. Their public bonded warehouse has been gazette by the custom office to store dutiable goods that came from oversea. Every items stored in their warehouse cannot be taken out if the payment of taxes and import duty are not being done at the custom office. To make their warehouse management more systematic, they are using electronic data interchange (EDI) to pass through information from their company to other company or parties. The usage of EDI system has quicken the procedure in the warehouse other than making it paperless.
Not to mention that the system can be learn easily because the features are easy to be understand and there are no training needed. Other than that, the information in EDI system can be accessible by other parties at different places such as custom officer in custom office because the system are using standardized format. More or less, this system has other benefit to the user such the information that being keep in it have safe security and it has just in time support in order to enhances intercompany operation that can reduces inventory costs.
However, there are also problems that need to be face by the company such as the EDI system cannot be used when there are not electricity resources because it need to be access through computer. It also need internet network and if there are no electric resources or no internet line, their work cannot be done. Last but not least, if there are mistake with the tracking number, the company will face the problem and take responsibility for the charges given.
Briefly, we have propose some recommendation to the company such as start over their business like what they have did in late 90s where they have more lorry and have more logistics activity during that time. Other than that, they should try to add more country to provide goods to their public bonded warehouse so that they have the opportunities to distribute their products directly to any duty free places and to do all this recommendation, first of all is that they need to enlarge their warehouse.